SPEECH BY THE PRESIDENT OF THE REPUBLIC OF INDONESIA BEFORE THE ANNUAL SESSION OF THE PEOPLE'S CONSULTATIVE ASSEMBLY 7TH AUGUST 2000

SPEECH BY THE PRESIDENT OF THE REPUBLIC OF INDONESIA BEFORE THE ANNUAL SESSION OF THE PEOPLE'S CONSULTATIVE ASSEMBLY 7TH AUGUST 2000



Honourable Speaker, Vice Speakers and Members of
the People’s Consultative Assembly,
Fellow Countrymen,
Ladies and Gentlemen;
Assalamu’alaikum Warrahmatullahi Wabarakatuh.

First of all, on this historic day and, God willing, full of blessings, let us together express our praise and thankfulness to the Almighty God, for His bestowing us, blessings and mercy so that we can gather to hold the Annual Session of the People’s Consultative Assembly of the Republic of Indonesia today. This Annual Session is the first session we arrange in the new tradition and order of our state, which in truth very much inspired and revived by the reform spirit. This is a great commitment and awareness of the nation to bring about the reforms all over in every principle of our nation’s lives, towards a better tomorrow.
There being a new way of implementing the governance and state affairs, we all certainly hope that this important political event takes on a constructive means which will encourage the improvement of work performance of each state apparatus and in due time will create peace, welfare and progress for all Indonesian people. The people of Indonesia, whom we love together and who, I am certain, will conscientiously follow what we are doing together during the eleven-day session, truly hope that this Annual Session of the People’s Consultative Assembly will result in constructive and useful benefits for all of the people. All of the people, who continuously pray, night and day, for
more than two years and who have experienced suffering, worries and many difficulties in their lives because of the national crisis we are experiencing, truly desire the realisation of a new Indonesia which will be able to create a new environment of people living together in peace, tolerance and harmony - where people are better able to enjoy justice, human rights and freedom and a higher level of welfare and where they live in a secure, peaceful, and orderly manner.
It is the Indonesian nation with such conditions and stature that we wish to build and aim at. It is to all the people of Indonesia, Ladies and Gentlemen, and not only for the interest of all of us in this room, that we direct all our moral commitments, intelligence and common steps to improve the conditions of our nation in the future.
Honourable Leadership and all Members of the Assembly,
When I made state visits to foreign countries, the main agenda of which was to inform them about Indonesia’s commitment to bring about a more stable, safe and democratic new Indonesia and to gain appropriate support and assistance for the recovery of post-crisis Indonesian economy, I often felt concerned to see our conditions whenever I witnessed the life of other nations which are much more developed, stable, democratic and prosperous. It is, in fact, these very conditions that we wish to attain together. I also feel more and more challenged to soon overcome, together with you and all the people of Indonesia, the national difficulties which we are facing these days, especially when I witnessed how other countries also experiencing crises two – three years ago, have now recovered and even risen and grown again. Certainly, I do not mean to compare ourselves too much with other nations and countries as they have their own character, root of problems and different conditions. However, at least, I would like to ask all the people of Indonesia to be reunited in our aspirations and commitments, as we walk together, to soon overcome the crisis towards a better future of Indonesia.
Today, in this respectable forum as the President who received the mandate of the People’s Consultative Assembly and also based on the trust received from the whole people of Indonesia, I will report on what the government has been doing in the last ten months regarding the fundamental problems and critical issues posing before us as well as a number of achievements so far we attained and what we will do subsequently. Needless to say, pursuant to the mandate contained in the Broad Guidelines of the State Policy (GBHN) for the period of 1999-2004, in accordance with the high expectations expressed by the people, and in connection with the targets the government strives to attain, that what we have achieved in the last ten months, is indeed the initial achievements of the five-year much larger planned achievements as stated in the GBHN.
Honourable Leadership and all Members of the Assembly,
It is like travelling on a big ship, which sails on the open ocean, not only do we need to know where we are or where we are going and what our destination is, but we also have
to know the conditions of the ship and the possible obstructions it may face and the challenge posed by nature, so that the ship not only arrive at the point of destination safely but also smoothly, quickly and at the right place. That is also the way we see the big nation of Indonesia progressing in its endeavour to build and shape a more stable, democratic and prosperous society in the future.
Today, our nation is in a period of transition. It is a transition towards realising a more stable, prosperous and democratic new Indonesia without neglecting its value system, ideals and national identity. We are learning from many other countries which are experiencing transitional periods. A period like this is indeed filled with sensitive and critical problems, which often can result in a setback and the deterioration of the nation’s living conditions. Politicians, and even the society at large, too often tend to feel that they do not need to obey officials, order and the prevailing mechanism because those are the things they try to change, whereas a new package of law, order and mechanism is not formed yet. It is in this situation that the social instability and disorderly behaviour are happening. This period is becoming more dangerous when the stronger, more popular, or superior sides are forcing their own will, thought, rules and regulations on others.
While our nation is truly in the middle of a transitional period with such insecure conditions, the problems arising at this post-crisis period are truly varied, complex and multifaceted, like the critical problems in the areas of politics, economy, social affairs, security and law as well as problems connected with fading of trust among all of us. In addition to the emergence of problems which are fundamental in character, there are also very much situational problems, which are reciprocally inter-linked with each other.
Honourable Leadership and Members of the Assembly,
As we all understand, the existence of the New Order was marked by a strong influence of the executive over the legislative and judiciary bodies, the domination of the central government over the regions, and also, the government patronage over the society. This results in the emergence of a process of accumulating dissatisfaction in the society, so that when the New Order government stopped functioning, there appeared an emotional and disorderly outburst. This psychological setting constituted the beginning of a road leading to a reformed government.
The prime problem we face during the period of transitional reign is that there appeared national disintegrating symptoms resulting from primordial social conflicts, the birth of separatist movements in some regions and also growing actions of anarchy and criminal activities among members of the society followed up by violent disturbances.
All of these gave rise to and increased the feeling of insecurity. Enthusiasm to invest has dropped, unemployment increased, social prosperity dropped drastically, especially in the riots-laden regions.
The dangerous symptoms and flow of national disintegration are getting stronger. This is due to the protest from the regions against the central government, which so far has been considered insensitive, unjust, and imbalance in term of regional development. In addition, it also is a result of a breakdown of cohesion and social integrity because of a lack of maturity and a lack of institutionalisation of harmony and tolerance in the society so far.
We just became aware, but possibly belatedly, that our nation, which is very complex and overwhelmed with the roots of conflict, does not have yet effective institutions, legal and ethical instruments for conflict resolution.
The surge of true disintegration which is really threatening the existence of the unitary state and national integrity of ours these days seems to be worsened by the mounting conflicts and power struggle among the political elite and forces, so that, honestly speaking, the political situation is still heated. The political atmosphere, we feel, is flowing and affecting the intensity of controversy and physical conflicts among certain parts of our society.
It is in the environment and conditions like this, ladies and gentlemen, that we face various kind of critical and fundamental problems inherited from the past and post-crisis situation, faced with high expectations and hopes of the society, and linked with the abilities and limitations of the government, the government continues to strive, work and struggle to discharge the big responsibilities, we are shouldering namely overcoming the crisis, continuing the reform process, safeguarding the nation’s unity and continuing national development in accordance with the GBHN.
Honourable Leadership and Members of the Assembly,
This great responsibility is truly a mission, which has to be carried out by all components of society and by the people of Indonesia from all walks of life. Certainly, the government has the very central role to encourage and to mobilise the elements of society to participate and contribute positively.
Based on the vision as contained in the GBHN 1999-2004, the core of which is the national development which we carry out and aim at the realisation of the Indonesian society imbued with peace, democracy, justice, competitiveness, progress and prosperity within the unitary state of the Republic of Indonesia, the government has arranged five basic agendas for development. They are: (1) to build a democratic political system and maintain unification and unity; (2) to realise the supremacy of law and clean governance; (3) to expedite economic recovery and build a sustainable and just development platform; (4) to improve the development of people’s welfare and cultural resilience; and (5) to improve regional development.
The government spells out these five basic development agendas and applies them by means of various policies and program of actions as well as by setting priorities. Besides
referring to GBHN and Propenas (National Development Program), the government will certainly be flexible, proactive and responsive. The dynamics of national development is not one which is linear and symmetric, but is replete with discontinuities and changes.
Honourable Speaker and Members of the Assembly,
In the area of politics and security, we inherit a situation that is laden with conflict of interest, followed everywhere by various law violations. Even though the government that was formed from the result of the 1999 general elections, already possessed legitimisation and reflects the will and desire of the people, its existence cannot automatically cool down the atmosphere of conflict, which deeply rooted in politics, economy and society.
Instances of social disharmony that begin in inter-ethnic, inter-religious, and inter-racial relationships, such as those we have witnessed recently, already causes difficulty for the government to determine policy priorities. All problems posing before us are of the same importance, so that there is no other avenue but to handle the problems in a simultaneous manner.
All the reform agenda could actually be carried out systematically with much better results should the public at large remain patient and commit themselves to creating a conducive environment by preventing the emergence of social conflicts and violent acts. Unfortunately indeed, that is not the case. As a result, some of our energy and time, which are urgently needed to speed up the reforms, have been devoted instead to solving these additional burdens.
The political reforms that we are now undertaking have thus far been able to merely yield some regulations to be used as a foundation for the work of the democratic process; the institutional development has only been able to re-function the executive, legislative, and judicature branches; and, the recruitment process to fill in the posts available in those three state institutions has just been started, failing therefore to holistically reflect the reforms’ spirit.
Meanwhile, the spirit to fully democratise the country has further excelled, and some of our people are eager to see the democratic process to be quickly institutionalised. As a result, there exist some substantial diversions of these important undertakings. The essence of democracy is being narrowly perceived as mere demonstrations; the supremacy of law is being equated to take the law into the people’s hand; and, through unilateral actions and claims, the regional autonomy is being perceived as having the right to seize all national income sources scattered all over the country. The bold actions taken by the government to quell violent acts have been harshly criticised by the people. There is indeed a need to understand that freedom, without orders coupled with the lack of respect for the constitution, regulations and ethics, is not a democracy but an anarchy.
Honourable Leadership and Members of the Assembly,
Still in the security and political domains, there is a need to admit that we continue to be confronted with, and hence challenged to overcome the separatist movements in Aceh and Irian Jaya. In these two restive areas there have been concerted campaigns perpetrated against the Unitary State of the Republic of Indonesia. At the same time, we are also confronted with the worsening situation in the Moluccas, forcing thereby the government to reluctantly invoke a civilian state of emergency in this trouble-hit region. This horizontal conflict with religious overtures certainly poses a real threat to Indonesia’s territorial integrity and needs to be swiftly handled to prevent it from spreading throughout the country. An attempt to further proliferate the conflict can be detected in the Poso’s incident and was also repeated in Jakarta and Medan but fortunately to no avail.
In other words, our nation-state is now politically confronted with a threat to its territorial and national integrity through these separatist movements as well as due to the prevailing inter-religious and inter-ethnic conflicts. We do not therefore have any other alternative but to join our efforts and to unleash all the existing potentials at our disposal to overcome such formidable challenges.
The world is deeply concerned over these distressing developments unfolding in Indonesia. Some friendly countries have honestly demonstrated their full support to help Indonesia exit from its difficulties. If we - as a nation - then fail to understand that there is a need to reawaken our battered national solidarity and to focus our attention on solving these problems; and worse still, if the world sees continuously the mushrooming of those unruly demonstrations, violent expressions of dissatisfaction, social unrest, and the practice of finger-pinpointing among ourselves, we may expect that they would consider us to be unable to put the house in order.
Honourable Leadership and Members of the Assembly,
In accordance with the message contained in the 1999 Broad Guidelines of the State Policy, the government has persistently carried out and systematically institutionalised the policy of democratisation. The separation of the Police from the Armed Forces is one among the many examples. The separation process of these two institutions will certainly take time, for it touches all of their infrastructures, stretching from structural aspect, culture, doctrine, to providing the laws and regulations to conduct such a move. One of the most important aspects required by the Police and the Armed Forces in order to be able to effectively carry out their respective functions is to issue regulations that distinctively establish their roles, duties, and responsibilities.
The empowerment of the Regional Houses of Representatives is carried out through the implementation of Law No. 22/1999. The election of the provincial governors, regents, and mayors is absolutely carried out in accordance with the dynamics of the region
concerned. There is no intervention by the government in that regard. This is indeed an extra-ordinary change compared to the past practice conducted during the New Order’s regime. Even for the gubernatorial posts whose candidates should by law be consulted first with the President as stipulated in Law No. 22/1999, the process of their elections has never been influenced by the attitudes and subjective evaluation of the President.
At the same time, we continue to uphold the media’s freedom. It is to be admitted that there have been negative excesses of this freedom, for some media fail to fully understand and firmly implement the journalistic ethics. I believe however that these will be self-corrected by the civil society, which continues to grow ever stronger.
The rationale behind the media’s freedom is that the people will be exposed to many news’ sources, which in turn will naturally sharpen their ability to digest the information contained therein. When this type of civil society is formed there will be no room for those media which manipulate news, conceal some facts, and dramatise others. Better still, those who fabricate the news will definitely be excluded and subsequently perished.
Our political development in the future is therefore a common endeavour of the government and the people to agree to give a full meaning to the democratic system. The democratic dimension of our governmental system will be judged by the apparent balance relations among the executive, legislative and judiciary branches. The people’s democratic dimension will be meanwhile judged by their ability to better develop a set of values to render all of its members to become equal before the law, to have the same opportunities to compete and participate in the political process, to be self-sufficient; and, to possess the ability to settle conflicts through peaceful means.
In the field of defence and security, the transformation of the Department of Defence and Security to the Department of Defence is intended to separate the defence functions from the security functions, affirming thereby the role of the Minister of Defence in formulating policies, the operational execution of which will be done by the Commander-in-Chief of the Indonesian Armed Forces. The separation of the Police from the Armed Forces and its placement directly under the President is the logical consequence of the detachment of the security functions from the defence functions.
The internal reforms within the Police and the Armed Forces continue to move forward. The essence of the Armed Forces’ reforms is to withdraw from their social and political functions and to instead focus their attention to safeguard the country from external threat and to relinquish all responsibilities of maintaining internal security to the Police. The Armed Forces’ reforms have also terminated their functional doctrine. We cannot therefore find any active military officers holding public offices. These reforms’ process will continue in an attempt to establish a workable and professional defence force and an independent police. These efforts are carried out in order to solidify the reforms agenda, which we are absolutely convinced cannot be attained without the presence of a stable and conducive environment.
At this particular juncture, I wish to remind all segments of our society that the democratic system - we are attempting to establish in this era of reforms - is a combination of the government’s ability to resist to resort to authoritarianism rule, and the willingness of the society to desist anarchism. Indeed, authoritarianism and anarchism are the two diseases, which normally threaten a new democratic system. We need to fiercely combat them.
In line with this democratisation commitment, the government supported by the legislative and judiciary institutions, has taken some measures in the field of law in order to uphold the supremacy of law in this country. We have enacted various regulations, including those required to strengthen the independence of judicial and investigative institutions. It is to be admitted however that we have not been so successful in upholding the laws, for in this transitional period we encounter many formidable hurdles. It is however very clear that we are on the right track. The government is determined to persistently uphold the supremacy of law and to combat the corruption, collusion, and nepotism (KKN) practices.
The due process of law in any state needs time to work in order not to compromise the justice, which is considered to be a cardinal yardstick of the supremacy of law. In an appropriate system of law, we cannot afford to abuse power or to emotionally settle a problem to satisfy the society’s alter ego or to suit the hatred harboured by an individual. The world is now watching us, whether or not we are able to carry out the democratic process; to protect the environment; and, to uphold and promote the laws and human rights in a proper, honourable and civilised manner. As a great nation, we have to be smoothly and successfully capable of setting an example as to how the process of transitions from an authoritarian regime to a democratic one, and from a personal rule system to a system that is based on the supremacy of law.
Honourable Leadership and Members of the Assembly,
The handling of conflict in Aceh is done by combining the humanitarian approach and the maintenance of the law. Although the humanitarian pause currently in place has not fully been able to stop violence - due to the presence of irresponsible elements that operate outside the Police/the Armed Forces and the Aceh Independence Movement (GAM) - it has at least been able to psychologically send a strong signal to the society that the two opposing camps are willing to find an acceptable solution to the conflict, which has claimed many victims. The government is determined to continue the process of reconciliation in Aceh. If the security condition is back to normal, the government will be able to effectively rehabilitate the destroyed infrastructures caused by the conflict. Better still, the government is currently drafting a bill on Aceh Special Autonomy as mandated by the People’s Consultative Assembly’s session held in 1999. The draft submitted by the Provincial Government and the Regional House of Representatives is now intensely studied in which some adjustments are needed in order to put it in line with our national constitution. God willing, the special autonomy status for Aceh will be materialised this year. With this special autonomy, it is to be hoped that a new and
effective regional government will be installed, bringing the welfare of Acehnese to a higher plane.
Such an endeavour will also be conducted in Irian Jaya (the Papua land). The timing of its implementation is expected to coincide with the one in Aceh. This is intended to provide more opportunities for the development of Irian Jaya’s territory and the improvement of its people’s welfare. A draft submitted by the Regional House of Representatives on the Irian Jaya’s special autonomy is seriously studied by the government and hopefully it will be also completed this year.
Meanwhile, the goodwill offered by Regional House of Representatives of Aceh and Irian Jaya to voluntarily formulate the aspirations of their societies within the framework of special autonomy certifies only too well the strong commitment of the societies of those two regions to maintain the perpetuity of the Unitary State of the Republic of Indonesia. The separatist movements arising from those two regions do not therefore represent the stand of the society at large. It has to be acknowledged, however, that such movements do not come from a void. They have been triggered by the amalgamation of three factors. First, it is the government’s long negligence to provide appropriate response to the need of welfare improvement of the local people, while at the same time it is letting a massive exploitation of natural resources of those regions. Secondly, it is the least accommodation of local concerns in local political process due to the government’s excessive control. Especially for Irian Jaya, this is all the more so when it comes to recruitment process for local bureaucracy in many fields and various levels. Thirdly, it has to be admitted that there are hot-headed separatist elements that systematically make use of the people’s discontentment for their anti-Indonesia political agenda.
In this regard, the government will continue to combine welfare, persuasive and accommodative approaches in the political process and in the bureaucratic recruitment, coupled with an enforcement of a law-based attempt to solve the problems in Aceh and Irian Jaya.
As regards the Moluccas, the government comprehends the two-year long horizontal conflict as a serious threat to the esteemed values of brotherhood among us as a nation. Efforts toward reconciliation between the opposing parties will therefore be carried out. At the same time, for those who violate the laws an even stricter action will be taken.
Facing all these, the government is determined not to compromise, let alone tolerate the separatist movements in this country. I also need to underscore that similar stands would prevail in facing all kinds of violent actions no matter who does it or where it takes place. The nation has bestowed countless unavailing sacrifices because of those fierce demeanours within the last two years.
If we—who are now entrusted to shoulder the mandate in leading this country—fail to uphold nationalism, to bring forward the people’s welfare, to prevent the cultural decay from occurring, and fail to observe the supremacy of law and the respect for human rights; history would register that we have tarnished the noble aspiration of our founding
fathers. History would inscribe that such failures would only lead to the defect of the goal of the freedom, the groundwork of which was laboriously laid down by our predecessors. Therefore, it is not supposed to happen. We instead are supposed to unite ourselves to be able to shoulder such a noble mission.
Amidst the more transparent and global world development, national solidarity and loyalty serve as a precondition and foundation for us to position ourselves and to perform respectfully in the international arena. We also have to prove before the global society that Indonesia is more than able to overcome its problems and will continue to progress to become a more developed and prosperous nation. For, no matter how intensive diplomatic manoeuvres are performed, the fulfilment rests on every thing we do domestically. The world observes the dignity of a nation through its accomplishments in various fields. And, an attainment in any field would only be possible if the nation were able to uphold a conducive political and security environment.
I need to inform that Indonesia has, at many global forums as well as regional conflict resolution, often been requested to come to the fore to offer its contribution. This alone certifies that our country remains taking an important role within the continuous dynamics of international relations. Not only does this give us an honour, it also on the other hand poses challenges.
The attempts to recover national economy continue to be carried out by inviting foreign direct investment. Indeed, foreign investors are interested in putting their money in Indonesia, which has abundant natural resources. Yet, this can happen only after the attempts to reconstruct the Indonesian image well materialise, restoring thereby the international confidence in Indonesia. In this connection, the government has launched an economic diplomacy in its foreign relations. A series of visits that some ministers and national business operators and I made to friendly countries are aimed as maximum as possible at recovering our national economy. The results emanating from these visits are positive as reflected in the strong support the international community has provided for the government’s strife for overcoming the impact of the crises and for maintaining our territorial integrity. What I learn from the dialogues that I have with the world leaders is the positive response they offered to Indonesia and their full support for Indonesia’s attempt for economic recovery and democratisation.
The conduct of foreign economic relations is aimed as optimum as possible at unleashing the existing potentials of those countries that have financial, management, networking, and technological capabilities. Those include the United States of America, the European Union, Japan, and others such as ASEAN, East Asia, Pacific, and Middle East countries.
Honourable Leadership and Members of the Assembly,
The economic crisis that has pulverised our nation has resulted in the degradation of economic activities, the decline of people’s welfare, and the deterioration of important economic institutions. The direction of the government’s current economic policy is to
restore and maintain macro-stability, covering the efforts to sustain economic growth, to reorganise and reconstruct the economic institutions, to fix the economic structure to render it healthier and more competitive, to protect small economy and the poor, and to improve the people-based economy.
Certainly, a sustainable economic recovery does not solely mean an economic growth. More importantly, it requires concrete corrective actions to past mishandling. Efforts to breed new spirit and values in the conduct of economic activities based on honesty, professionalism, and balance between individual and social responsibilities need to be maintained. The accomplishment of economic recovery must be gauged through the delivery of a sense of justice, a sense of belonging and participation of the society at large in the development process.
It has to be admitted that economic stability at the shifting of government was righteous after going through ponderous turbulence in 1998. This very fact that emanated from the attainment of the previous government was commendable and, although it had yet to be sufficient to revive the national economy, has laid down a strong foundation for the work of the new government. Objective conditions of the national economic order as a whole that are handed over to the new government are, however, burdensome. Testifying these are, among others, the low real output, the fragile banking system and the tremendous insolvent credits. At the same time, the people’s welfare continues to shrink as utterly testified through the declining per capita income and the augmented number of poor people. Lower average wages and incessant layoffs have made twice as much unemployed people, doubling thereby the social burden that we should bear.
All these upset state budget very vividly. The government liabilities, especially domestic debts caused by the implementation of the banking restructuring program, have been soaring up during the crises, outstripping safety line. The government also has to face other burden of structural problems such as weak judiciary and law enforcement systems, plethoric corruption, and poor conduct of public and private institutions. The result is apparent, which is the declining trust of the society at large in the government and other public institutions. The credibility of public institutions dipped down to the lowest level, leading thereby to the impossibility of bringing the economy to come round speedily.
Meanwhile, programs of crisis resolution and economic recovery carried out by the foregoing government in co-operation with the International Monetary Fund (IMF) has brought about basic changes in the process of public policies. The participation of the IMF with its huge funds in Indonesia’s economic recovery program requires the government’s improved discipline and strong commitment in order to be able to comply with the policy framework agreed upon. This gives rise to a perception of an act interfering government’s sovereignty. Yet, the government is of the view that international commitments have to be fully observed, while believing that national economic recovery program belongs entirely to our competence. In the context of our co-operation with the IMF, I need to emphasise that it does not mean that we do not have initiative and enough room to manoeuvre, including the need to bear in mind the non-economic aspects in various economic policies. With full awareness, discipline and
unfettered standing and responsibility, the government will carry through policies which are expected to bring about positive impacts to our economic management.
Honourable Leadership and Members of the Assembly,
International experience demonstrates that countries encountering deep economic crisis, even worse with multidimensional problems, need extended time to reach significant progress. Nevertheless, it is to be noted that within a very limited term some progress in the economic and financial fields have been registered.
Until today, we have been able to maintain the discipline of macroeconomic policies that serve as an important key in creating a conducive environment that paves the way for the recovery efforts. In the field of fiscal policies the government has been able to draw up a nine month state budget during the transitional period (April - December 2000) in order to adjust it to a calendar year. Besides, the government also sets in motion a new display structure of budget data in accordance with truthful and transparent international format.
The government’s accomplishment in laying down a prudent fiscal policy within a limited time deserves to be underlined. The government also succeeded to secure external funding assistance from the CGI to offset the deficit and successfully concluded debt rescheduling. Such accomplishments clearly bolster the government’s capability to carry out an appropriate fiscal stimulation, to prepare the implementation of fiscal decentralisation, and to protect the poor people without compromising prudence. At the same time, public pressures to have civil servant’s salary significantly raised and the government’s intention to sustain the subsidy are not an easy task to overcome and satisfactorily fulfill.
Despite the limited time of nine months, the progress achieved in the banking field that was severely hit by the crisis is quite numerous. Currently, almost all facets in the process of banking restructuring are completed. Re-capitalisation is also supported by the instalment of a new and more solid management, followed by the implementation of management and working contracts to keep banks healthy. The government and Bank Indonesia continue to improve the observation of re-capitalised state-owned banks. This step is conducted to prevent the past irregularities in bank management from recurring.
In line with the attempt to rescue the banking system, the restructuring of the companies’ debts which has long been idle and produced no significant outcome, has now been properly put in order. The Committee for Financial Policy has established basic policies for the restructuring of companies’ debts which are placed under the supervision of the Indonesian Bank Restructuring Agency (IBRA) as well as those that are controlled by the Jakarta Initiatives’ task force. Concurrently, the government will also apply an authoritative and reliable legal threat mechanism in order that the acceleration of restructuring can be effected. The establishment of a joint economic team with the attorney’s office and the police to deal with uncooperative debtors, the appointment of ad hoc judges, and the commissioning of a team charged with restraining corruption in
courts, all constitute a part and parcel of the government’s endeavour to improve the performance of the legal aspect in the context of economic recovery. All of the progress made is due to the hard work of the government along with the other components of the nation, including the legislative body, the judiciary body and the community at large, encompassing the mass media, who have participated in the endeavour.
I find it necessary to affirm that the government is highly committed to improving the small and medium economic enterprises as well as co-operatives involving the majority of our people. The pattern of the approaches adopted is holistic in that various policies are integrated, starting with the empowerment of the human resources and management, the abolishment of the market distortion, including the correction of unfair and unhealthy competition practices, going on to the widening of the market accesses, that of capitals and that of information. A policy of advocation, in the form of providing credits for subsidised programs as well as constructive venture capitals, has also been implemented. For that purpose, evaluation on and corrective measures against the abuse of program credits are being prepared.
In this process of recovery, the government also continues to launch corrective measures against various wrongdoings resulting from the KKN practices in the past, in particular those related to contracts and permits of production, investments, and trades which inflict losses to the people, violate the principle of justice, and which disregard the preservation and protection of the living environment, in spite of the fact that we are steadfast in respecting international agreements highly. All of these problems are found in almost all sectors, including the means and infrastructure sectors such as electricity, telecommunications, harbour, manufacturing industries, and the primary sectors such as agriculture, forestry, plantation as well as the mining and energy sectors.
Corrective measures will continue to be effected with regard to subsidy policies which are not effective and which only burden the budget. Changes in the food subsidy by means of the Special Market Operation as well as in the fuel and electricity subsidies will be made with a view to lightening the burden of the budget. Adjustments to these policies will be made by continuing to protect the interests of the poor part of the society.
Honourable Leadership and Members of the Assembly,
The recovery programs having been implemented, our economy has now moved away from the crisis circle, although it is still in the early stage and is not strong enough yet. The achievements made in the last nine months, although objectively speaking many, are still meagre compared to the expectations of the government itself as well as to the assignment it has to shoulder pursuant to the message of the Broad Guidelines of the State Policy, namely to meet the expectations of the people at large.
In the future, sustainable and just economic recovery will be underpinned by four pillars of program, namely: the maintenance of the macroeconomic stability; the strengthening of economic institutions; the improvement of structural policies; and the protection and
empowerment of those who have been left behind, who do not have the ability and who are poor. In order to maintain a conducive macrostability in the context of economic recovery, the government will continue to adhere to the principle of prudence in accordance with the dynamics of the recovery per se.
The government is aware that in the future the conditions of the State Budget will be increasingly weighted down by the increasing populist pressures which have the potentials of causing it to violate the signals of prudence as well as by the debts which the government has to manage. On these grounds, the government is endeavouring towards the availability of a significant primary fiscal surplus and towards reducing the fiscal risks resulting from contingency obligations. The government is at present developing a bond market infrastructure as well as institutional facilities, regulations and the management of risks, and is concurrently developing a precise instrument for the management of its debts.
The fiscal policy will also encompass the consolidation of the government’s and the military’s balance accounts as well as those of various foundations which have up to now been recorded off balance. Likewise, regional government’s budgets will also be consolidated. The implementation of decentralisation and regional autonomy as regards the central-regional balance aspect to be effective as from January 2001 will certainly not satisfy all parties concerned. Nevertheless, the government’s commitment to implement the fiscal decentralisation will never wax and wane.
In the area of the monetary, Bank Indonesia will continue to adopt a monetary policy in line with the economic target and needs which have been fixed. The government will continue to honour the independence of Bank Indonesia in determining monetary policies. In the context of maintaining macrostability, the government will continue to co-operate constructively with Bank Indonesia to strengthen our economic fundamentals so that these will be realistically reflected in the exchange rate of the rupiah.
The second pillar in the context of the economic recovery is the improvement of economic institutions. The recovery of the real sector has become the focus of attention of the government at this juncture. In the short term, the recovery of the real sector will open up new job opportunities which will alleviate unemployment by means of bigger industrial capacities. In the long term, economic restructuring must be able to provide an impetus for the improvement of the national competitiveness, the creation of quality job opportunities, and the achievement of quality and efficient products.
Restructuring is said to be successful if and only if it is coupled with the adherence to the principle of good governance. One of the messages of the Broad Guidelines of the State Policy which the government has to execute is the eradication of the KKN practices. Good governance will not only change regulations, but also accept and put into practice new values as a guide to a new way of life. This is very important in view of the fact that the problem of corruption has been highly structural and cultural in nature.
In the context of improving institutions, on the basis of the results of audits, various corrective measures will be taken at important institutions such as the Bulog (Bureau of Logistics), Pertamina (State Oil Company), PLN (State Electricity Company) and other strategic institutions. Bank Indonesia must also take internal corrective measures in the context of building up its authority and the confidence of the public in the functions and existence of the central bank.
The IBRA and the BUMN (state-owned enterprises) have common missions in terms of the budget, namely to yield earnings from the sale of assets and from privatisation. Nevertheless, the sale of assets and the privatisation do not solely aim at promoting the state’s revenues, but, more importantly, at preventing the worsening of the quality of the assets as well as at improving efficiency. International experience has shown that the aggravation of assets will give rise to a rate of return of only about 30 to 40 per cent of the value of the assets. To avert this, the IBRA will accelerate the sale of the assets under its management.
In the past, state-owned enterprises became the sheer sources of inefficiency and the objects of corruption by government officials. A comprehensive plan is now being drawn up, on the basis of which the state-owned enterprises privatisation program will be executed in the form of efficiency improvement, transparency, and public accountability as well as the profitability of the state-owned enterprises now under preparation.
The government will also re-lay the foundations of a healthy, competitive, productive, just and sustainable economic sectors. The government’s focus of attention is the development of the agricultural sector, including forestry, plantation, and maritime fishery, for food resilience and diversification, concurrently encompassing the welfare of economic players. Manufacturing industries will be rebuilt with a view to creating strong and competitive industrial structures and linkages. The means and infrastructure sector shall achieve efficiency and reliability as well as controlled security. A qualified, efficient, competitive and affordable service sector must be brought into reality.
Encouraging export growth and industrial communication, mining as well as energy restructuring which will bring about significant contributions to the state revenues shall be continuously motivated and executed. In this regard, the living environment and community development aspect constitutes a prerequisite and cannot be disregarded in the overall national economic and industrial development.
The third pillar is the continuation of the structural policy by providing complete regulations deemed necessary in order that the market mechanism can operate in an efficient and fair manner. Some of the regulations have been effected such as the business competition act, consumer protection act, living environment act, and bankruptcy act.
The fourth pillar is the improvement of the people’s welfare and prosperity in a just manner, including the eradication of poverty and the protection of the vulnerable and fragile groups. For that purpose, the government needs to achieve an economic growth rate siding with the eradication of poverty, improvement of access to basic facilities
(health, education, and information) and improvement of means and infrastructures which are requisite for facilitating the mobility of economic resources, production factors as well as goods and services.
Honourable Leadership and Members of the Assembly,
The multidimensional crisis which has hit us since 1997 has given rise to two setbacks in the endeavour towards the solution of the poverty problem in Indonesia. The conditions of the poor people have aggravated, resulting from the shortage of job opportunities and the decline of their purchasing power. Besides, various social maladies have spread, such as the abuse of narcotics and other dangerous drugs, prostitution, violence, and the erosion of moral values. Various natural disasters such as earthquakes, floods, and fires have also accelerated the aggravation.
In various pockets of poverty such as urban slums and underdeveloped areas, a high death rate of mothers and a low degree of education participation among school age children have been recorded. The increasing occurrences and spreading of social disturbances have also given rise to the drastic lowering of the level of health and nutrition of the society. At the same time, the spreading of infectious diseases such as tuberculosis, malaria, dengue fever, and HIV/AIDS continues to be rampant.
All of those have further burdened the endeavours to build up people’s welfare and to alleviate poverty. On these grounds, the government will seriously continue to push forward the role of the members of the community as the main actors of the development. The empowerment of the community, in particular the people in the poor brackets, will continue to be effected by means of cross-sector co-ordination. The business circle has also been invited to participate in the solution of the problem in people’s welfare and poverty solution. Concurrently, people are also made to prepare themselves for possible natural disasters and social disturbances. The improvement of the society’s capabilities in solving the problem of old age, that of the invalid, that of the derelict which general is in nature, as well as in handling the victims of narcotics and other dangerous drugs, and street children having their specific characteristics, continues to be effected, too.
In the period of these first ten months, the government has, in the area of people’s welfare and poverty alleviation, executed various action programs including their priorities. These programs started with programs in education, health, the fostering of the concord between and among members of different religions, the empowerment of women, the development of youth affairs, going on to programs for the solution of unemployment problems. All of these have been directed with a view to enabling the society to exit as soon as possible from all of the suffering and hardship of life caused by the crisis which has hit our motherland since 1997.
In the context of handling the impacts of the social disturbances and natural disasters, regional governments, fully supported by central government agencies, have mobilised co-ordination from the emergency-response stage replete with various humanitarian aids
up to the endeavours to reconcile parties involved in social disturbances and the alleviation of traumas in the case of natural disasters. Collaboration with self-supporting government and non-governmental organisations has also been mobilised in the form of mutual co-operation, both for the rehabilitation of the physical environments and for the community’s economic recovery. An encouraging phenomenon is the high degree of social solidarity of the members of the society, as evidenced by the flow of spontaneous aids from all circles of the community to the people hit by the disaster or those who have become the victims of social disturbances.
Collaboration in the alleviation of poverty, and that of being left behind in the development, in a number of provinces has been done by integrating the programs of the respective agencies as well as by accelerating the execution of the programs. Co-ordination has also been done in mobilising funds, especially foreign aids through donor countries, bilaterally or multilaterally.
In Aceh, for instance, joint actions have been done to rehabilitate the damages of various means of education, health, religious facilities, public facilities and people housing compounds. Prior to that, various activities were done to repair damages and to improve the community’s welfare through the collaboration of various religious organisations, non-governmental organisations, women’s and students’ organisations, as well as local business associations. The activities included the effort to re-install Sabang as a free port, its infrastructure development and investment-support facilities being provided by friendly countries. We are grateful to God that these endeavours begin to get positive responses from the local people.
In Irian Jaya, a crash program has been designed jointly by various agencies with a view to supporting the regional government in the efforts to accelerate development in that province. Each agency has effected the re-allocation and revision of its programs for that purpose. Efforts have been made to eliminate impeding bureaucratic processes. Development priorities have been focused on health facilities, education facilities, and the empowerment of the people’s economy. The development of the communication and irrigation infrastructures has also become the centre of our attention.
Of similar importance, various concerted efforts have been carried out in the Moluccas and the Northern Moluccas. Social, mental, spiritual, physic, and economic rehabilitation of the whole society are conducted jointly by the government institutions, non-governmental organisations and the business people. The reconciliation initiatives genuinely coming from religious organisations and various elements of the society have also brought about fruitful outcomes including accords to recuperate the situation, enabling thereby the rebuilding of thousands of houses, places of worship, schools and other infrastructures.
Nevertheless, it is indeed unfortunate that similar provocation inciting new conflicts recurs, shattering therefore the positive results achieved. Yet, in line with the efforts to resuscitate security in the restive areas, development by the local people and the central government in those safer islands both in the Southeast as well as in the Northern
Moluccas remains unaltered. All available ways and means are discharged to ensure the humanitarian assistance to roll on.
Measures to restore the severe impacts of natural disasters in Banggai, Belu, Bengkulu and Sukabumi have been conducted in a more systematised and planned fashion, comprising emergency assistance, damage assessment, rehabilitation and anticipation of a possible subsequent disaster.
It has to be recognised that the government in fact possesses insufficient resources to overcome all the problems without delay. Expectations of those suffering from disasters much surpass the government’s capability to meet them. Panics burst out from a disaster often lead to ineffective distribution of aids. Against this backdrop, the government is designing an inter-sector co-operative unit to enhance readiness and capacity of the disaster-prone regions to anticipate them.
Honourable Leadership and Members of the Assembly,
It is also worth telling that the handling of social unrest in West Kalimantan is now reaching a brightening stage with the readiness of 2,000 families of locally displaced people to be resettled through local transmigration or intermission resettlement programs. They will beyond doubt have new life in the people’s plantation system supported by the local business society.
I should admit, however, that not all of those impacts of social unrest are fully dealt with. The physical and economic rehabilitation of those who suffered from the social unrest in the Central Sulawesi, Lombok, or Tegal has yet to finish. The government has many shortcomings, indeed. This applies also to the case of the East Timor’s refugees, the handling of which remains difficult. The management of those displaced persons residing in the East Nusa Tenggara, too, faces similar obstacles. The international attempts to re-deploy some of them to East Timor have yet to conclude. It is however more than certain that the government will undertake all efforts to overcome the problems.
Honourable Leadership and Members of the Assembly,
While comprehending the tall task we have to shoulder in the days to come, the government remains unbending to carry through its resolve to take any appropriate chances to bring the country and the nation out of the lingering multidimensional crisis we are currently encountering.
The government’s policies and measures to consistently bring into existence a clean and good governance will continue to progress. This will be carried out mainly through the performing of steady and justifiable measures to put an end to the KKN practices in the government’s institutions, to improve the judiciary institutions’ independence followed
by the refined professionalism and moral integrity, and to improve transparency in information and policy making.
Of no less importance, the democratisation agenda within the government and other state institutions is to be constantly undertaken. It is in this regard that I enthusiastically follow with full interest the deliberation of the Assembly’s Ad-hoc Committee on the amendment of the Constitution. It is to be hoped that the result of the amendment could pave the way for the righteous function of the work of democracy’s mechanisms in our national system. All administration operators, whatever their functions or levels are, have to be in compliance with the systems, ethics, and rules of the game which are built upon democratic norms and logic as well as constitutional edicts.
Also, the preparations for various laws and regulations in the political field and the implementation of regional autonomy continue unabated. For Irian Jaya and Aceh in particular, the bills on regional autonomy, God willing, will be deliberated at the respective Regional Houses of Representatives this month, to be subsequently submitted to the House of Representative. This preliminary deliberation is required in order for us to attune the balance between the local aspiration and the central government’s obligation to safeguard the sovereignty of the Unitary State of the Republic of Indonesia.
Compatible with this political democratisation, the government will also promote the creation of an economic democracy, capacitating the opening of a wider participation of the public at large in the business and economic interactions. In this context, an economic democratisation covers the efforts to strengthen the people’s standing vis-à-vis private as well as public institutions in the fields of economy, finance and industry.
In an attempt to improve the people’s welfare and to alleviate poverty the government is resolved to pursue a more co-ordinated actions with a view to making the programs more availing. The co-ordination will be made fitting with the commitments of all the institutions to carry out consistently the decentralisation and regional autonomy.
On particular matter of the improvement of civil servant’s welfare, the government will actualise it on a gradual basis, followed by the welfare rectification of workers, peasants, and other low-income people. The people’s empowerment through various micro-credit programs, social security, access to education and health services, access to appropriate infrastructures, food sufficiency, and job opportunities are of paramount importance to be made available in the attempt to alleviate poverty. Better still, the empowerment of women and the quality improvement, the respect for their rights, and their effective employment will be further ameliorated.
Honourable Leadership and Members of the Assembly,
This year is a highly decisive time to set the direction of Indonesia’s travelling to the future. The mélange between and among our common commitment, responsibility and initiative also serves as a determining factor to the fate and future of our nation. Through
this grandiose event we are indeed being appraised as to whether we all, especially the leaders and political elite, are capable to develop the spirit of unity and invent a new brotherhood, which are the real ardour and fundamental values inherited from our predecessors, to in unison face the national problems for the sake of our beloved people.
The world eyes us all. And, we are indeed in the process of charting a new Indonesia’s history entering the new millennium. More than two hundred million Indonesian people will be very thankful and glad should, through wisdom, intelligence, and compassion, we be able to produce a genuine national solution in an orderly, democratic as well as decent and ethical manner, for otherwise, we would fail to build consensus and find an accurate solution.
As the head of the government bearing formidable tasks and responsibilities, I, in accordance with the mandate contained in the Constitution and in line with the wish of the Indonesian people, am really more than willing to do whatever necessary to better improve the performance of the government by adopting proper policies and strategies and sharpening agendas and priorities. I will certainly learn from the shortcomings and weaknesses committed during the last ten months in office in order to better perform. On the other hand, we would use the accomplishment achieved by the government as a strong basis to gain better results in the days to come.
Clearly, the government’s resolve and determination to continue overcoming the crisis, safeguarding the national integrity and carrying out the reforms will never be incessant, no matter how dreadful the problems and challenges are which we are confronting. Similarly, the government will endure its deep commitment to keep on developing democratic life, human rights, justice, supremacy of law, social welfare, regional autonomy, stability and social order.
With a passion and sincerity, I have to confess that in order for the government to be able to uphold these difficult yet noble tasks, it necessitates the full support of the Indonesian society as a whole, for without it the government’s efforts would only be fruitless. Criticisms, comments and responses from all the distinguished members of the Assembly are indisputably needed to enable the improvement of the government’s performance that I currently preside over.
To all people of Indonesia, I humbly apologise for being unable to fully solve the prevailing problems during the last ten months. Rest assured, however, that we would work even harder and proceed to strive for more accomplishment.
Finally, with the blessing of this august Assembly, allow me to conclude this speech with my sincere thankfulness for your patience and attention, and at the same time solicit your pardon should there be any inappropriateness in addressing the Assembly.
May God the Almighty bless our noble intents and aspirations, and may we all be granted His guardianship and direction.
Thank you.
Wassalamu’alaikum warrahmatullahi wabarakatuh.


PRESIDENT OF THE REPUBLIC OF INDONESIA
K.H. ABDURRAHMAN WAHID


Sumber: http://www.ri.go.id/istana/speech/eng/07agustus001.htm
Koleksi: Perpustakaan Nasional RI, 2006